COFFEE

Costa Rica 2019 | AGRICULTURE | B2B

Cooperativism has been a key part of Costa Rica's agricultural sector for 60 years, helping to promote and advance the coffee sector further.

Luis Fernando
LUIS FERNANDO
Madrigal General Manager
Coopedota
Carlos Vargas
CARLOS VARGAS
General Manager
Coope Tarrazú

How have you seen the development of value-added products in the coffee industry?

Luis Fernando Madrigal Coopedota has been around for 58 years, and in 1995 we started roasting beans. But our growing and roasting processes were slow because we did not use machinery. We adopted new financial, administrative, production, and merchandising strategies. We roast 10% of our production, which is the first step in the value-added chain. We plan to grow the amount of roasted coffee we supply to the local market by 10% per year. The other value-added activity we are working on is our coffee shops. Our main coffee shop in Santa María de Dota sees 25,000 customers per year. That is a great model to establish our franchising business, which we intend to start in 2020. Our other business line is tourism. We are based in a beautiful area with national parks, reserves, and other beautiful sites. We also produce clean electric and biomass energy and are starting an interesting new project regarding intelligent farming and agroindustry.

Carlos Vargas At Coope Tarrazú, we have sought to increase our global presence by selling to other local exporters and looking for buyers in the market; the majority of our sales is to coffee roasters. For us, it is about making the chain shorter. Although at some point there is an importer that fulfills a purely logistic function, the negotiation is done directly with the roasters. High-quality coffee roasters have a greater capacity to maintain a stable price level. Our buyers are willing to pay prices that are much more sustainable and that recognize the cost of making high-quality coffee. Our current negotiations are at these levels, with fixed price of USD1 per pound for normal and USD2 for high-quality coffee. We must ensure that whoever produces the coffee has excellent sustainability of production. The high quality of Coope Tarrazú coffee allows us to play with that and improve the conditions of the supply chain.

What are you doing to get more use out of your coffee beans?

LFM Our current activities are principally related to coffee, but we are thinking beyond just coffee. So, we are talking about the potential in the agroindustry for other products like fruit and vegetables that are grown in the higher altitude areas of the region. It is important to add value by developing services and creating more economic activity. We also have a coffee school where we provide barista training. We have an excellent program with local high schools where we train 15 baristas every year as well as a variety of other programs to train people in the coffee industry.

CV The challenge is to improve everything we are doing. Equally important, reducing emissions is fundamental, and these are mainly due to chemical fertilizers. In the coffee process, the pulp that comes out of the coffee is a by-product, and from it we can produce organic fertilizer that will reduce emissions, improve the condition of coffee plantations, and even reduce costs for producers and generate new income for us. At present, our big challenge is what to do with the byproducts. So far, we have invested and managed to make processes parallel to the harvest. Moreover, we want to improve the quality of the compost, and to achieve that we are making alliances with local and international universities and are looking at the possibility of converting the brush into biofuel. We have also been focused on innovation in our industry to give added value to our product.

What role do certifications play in your commercial strategy?

LFM The environment is extremely important to us, which is why we are carbon neutral and have Rainforest Alliance certification. At the same time, we are working hard to increase the premiums our producers receive. Therefore, we are working with our Rainforest Alliance producers to bring them under the Blue Flag standard. Coopedota is already a five-star Blue Flag company, and we want our producers to have this too. It could provide us with another competitive edge.

CV We are 100% certified Fair Trade and have maintained that certification for 15 years. It guarantees good practices at the farm level and transparency to a coffee buyer, maintaining the minimum price of USD160 by Fair Trade. We comply with the Starbucks code of conduct and are certified by Rainforest Alliance.